Budget 2015: Uniform VAT rate structure for mobile phones

The budget will play a very critical role in shaping the future growth of mobile handset industry in India. Smartphones today have a huge potential to boost education, healthcare in the country and the government should try to ensure that it reaches in the hands of every Indian.

We expect that the government will take measures to promote domestic manufacturing and investments in technology, especially for companies like Lava International which are now looking to tap India’s manufacturing potential and create jobs in the country. Industry players should get incentives and taxation reforms such as a ten year tax holiday, interest free loans, exemption of special CVD (SAD) on mobiles accessories and parts, components for post sales warranty repair, exemption of BCD/CVD on Capital goods and removal of retrospective amendments in tax laws amongst others.

A level playing field should be created between e-commerce and physical retail segments by putting a uniform VAT rate structure for mobile phones, until GST gets implemented.

Additionally, companies should also get full support in the cost for skill development for enriching the existing talent pool in the country. Talking about investments, we expect the government to also take measures in providing 100% clarity, transparency and ease for foreign investments in the country. A lucrative return on capital is very important for the investors to invest and is most critical for India. Overall we believe there is a positive sentiment in the industry and the budget announcements will augur well for the Indian consumer and economy.